Bitcoin ($BTC) is approaching the next decision point and volatility is high as bulls and bears battle to send the next big move either up or down.
Patience is required
Where Bitcoin goes next is in the lap of the Gods. The inauguration of the new Trump administration in the US is still a month away, and the huge boost that this can bring to the crypto industry is still to come.
Therefore, it may well be that in the intervening time all manner of price manipulation could be brought to bear on Bitcoin.
Back down at around $70,000 is an area where significant leverage could be liquidated, while at $100,000 and above, the same is true. It might not be beyond market makers to liquidate both sets of traders.
All this said, for those with the capacity and the patience to wait it out, there could be a lot more upside to come as nation states are forced to enter the race for Bitcoin given the parlous state of their own fiat currencies.
Economic mismanagement
In the UK, the Prime Minister Keir Starmer recently asked industry regulators to come up with a plan to grow the economy. The fact that regulators generally do the opposite, by reining in businesses and forcing all sorts of compliance requirements on them, points to a total lack of understanding by Starmer on how to go about managing the UK economy.
Regulations generally have the effect of suppressing the private sector, from where the vast bulk of economic activity is likely to come, and this is a problem not just in the UK, but across the whole of Europe.
It is to be hoped that the UK and European governments will realise this before their economies are driven too far into the dust. Also, if the US does go ahead with setting up a Bitcoin Strategic Reserve, Europe will need to enter this particular arms race or face being completely left behind by nation states that do understand the importance of accumulating Bitcoin.
The whole financial world is in the process of being turned upon its head, and what was accepted financial wisdom only a very short time ago, is being proven to not cut it in today’s new digital age.
Seesaw volatility
Source: TradingView
The short-term price chart for $BTC shows that a fake-out to the downside was bought back up again by the bulls. Seesaw moves both up and down in short periods of time totalled as much as $3,000 each one.
That said, as volatility rises, volume is declining. This could presage a number of outcomes. It might just be that the major buyers are leaving well alone for the time being, in anticipation of tax sell-offs and many other business-related reasons, which could lead to the price going sideways or even downwards for a period of time.
On the other hand, declining volume could augur a sudden big move in either direction as the price coils up ready for a major spike.
Weekly MACD nears decision time
Source: TradingView
The weekly chart for $BTC demonstrates that the price is still maintaining above the ascending trendline. Also, the red candles are diminishing in size as they come down. If this week’s candle can close above the ascending trendline and even end in the green, this would be a real positive for the bulls going forward.
At the bottom of the chart, the MACD is currently showing that the blue indicator line is slightly bending downward. This will need to change in order to avoid a crossdown below the orange line and a subsequent period of down movement.
Also, the histogram bars are still light green and declining in size. They will need to start rising again in order to see a continuation of this bull market. Although, another period of sideways or downwards price action that takes the price all the way back to $70,000 must not be discounted.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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